Illustration of phone showing Arkansas Contractor Licensing Guide

Categories

See how you can use Levelset.
Book a demo

If you’re considering starting your own contracting business in Arkansas, congratulations are in order. Going out on your own is a big step. While there is quite a bit of risk involved, you also get the benefits of being your own boss, choosing the projects you want to work on, and calling the shots. It’s all up to you, as long as you meet the Arkansas contractor licensing requirements.

But with everything you have going on, between gathering all the tools and equipment you need, squaring away insurance, and lining up a workforce, keeping up with Arkansas contractor licensing requirements might be too much. Let this guide lead the way.

Working outside Arkansas? Check out the Ultimate Guide to Contractor Licensing in Every State.

Who needs a contractor license in Arkansas?

Arkansas has some pretty specific requirements for contractors, and they’re based on the type of project as well as the value.

All commercial contractors working on any project that is not a single-family residence where the contract value is $50,000 or more need a license. Arkansas considers single-family residences any building that holds up to four residences.

Residential contractors require a license if they work on projects over $2,000. In both cases, the contract value included the cost of materials, subcontractors, permits, and anything else involved in the project.

Subcontractors can work with certificates instead of licenses, as long as they work for a properly licensed contractor. 

Do you need a license to file a mechanics lien in Arkansas?

Arkansas’ mechanics lien laws do not explicitly require a contractor to carry a license in order to file a mechanics lien. However, the contractor licensing statutes and case law suggests that a license is necessary to be able to file a mechanics lien, if required.

A contractor’s license in Arkansas is required for contractors and subs if the contract price is over $50,000 on commercial projects and over $2,000 for residential projects. Additionally, under Ark. Code. §17-25-103, “[n]o action may be brought either at law or in equity to enforce any provision of any contract entered into in violation of this chapter.” Lastly, Arkansas courts have held that an enforceable contract is required to file a mechanics lien. Therefore, it appears that a license is required for lien rights in Arkansas.

Related: How to File an Arkansas Mechanics Lien – Step by Step Walkthrough

Getting a commericial contractors license in Arkansas

There are many different licenses for which Arkansas contractors can apply, but luckily they all go through the Arkansas Contractors Licensing Board

Commercial contractors have a choice of three licenses: the restricted commercial license, unrestricted commercial license, and specialty license.

Restricted Commercial License holders can work on any project (including residential projects) with a contracted value of up to $750,000. As the name suggests, unrestricted license holders can work on any project, again including residential. Specialty contractors can only perform functions of their respective specialties.

Both Restricted and Unrestricted Licenses break down into the following categories:

  • Heavy construction
  • Municipal and utility
  • Highway, railroad, and airport
  • Building (commercial and residential)
  • Light building
  • Mechanical (including Plumbing and HVAC-R)
  • Electrical

The requirements for both license types are largely the same:

  1. Complete this application.
  2. Submit a $100 filing fee via check made payable to the Contractors Licensing Board.
  3. Give three references on the forms provided in the application.
  4. Provide proof of a $10,000 contractor’s bond.
  5. Take and pass the Arkansas Business and Law test and provide a copy of the score.
  6. Provide a compiled report from a CPA that is less than one year old. The statement must show one-half of the net worth requirement for the classifications in cash in the bank. For commercial licenses, the minimum is $50,000. For specialties, the minimum is $5,000. In lieu of a CPA report, applicants can submit a bond using this form.
  7. If applying as a corporation, LLC, LP, or LLP, attach a copy of the articles/filings from the Secretary of State. 
  8. If you have one or more employees, submit proof of Worker’s Compensation insurance.
  9. If you’re applying for a residential License or a specialty classification, complete and submit the appropriate application as well. You don’t have to send an additional fee or take an additional test.

Getting a residential contractors license in Arkansas

Contractors working on residential projects with contracts valued at over $2,000 will also have to carry licenses. They have a choice between residential builder, residential remodeler, and home improvement licenses.

Residential builders license

A residential builders license is a requirement to build single-family residences. The requirements are:

  1. Complete this application.
  2. Submit a $100 check made out to the Contractors Licensing Board.
  3. Supply three references on forms provided in the application.
  4. Take and pass the Arkansas Business and Law test and provide a copy of the score.
  5. Supply a compiled report from a CPA, and all statements must show positive net worth.
  6. If applying as a corporation, LLC, LP, or LLP, attach a copy of the articles/filings from the Secretary of State. 
  7. Provide proof of Worker’s Compensation insurance if you have one or more employee.

Residential remodelers license

A residential remodelers license is similar, except that they can’t build new homes, yet they can remodel or build an addition. It’s available in both limited and unlimited classifications. With a limited license, contractors can only work on projects valued at less than $50,000. 

The requirements for limited licenses are:

  1. Fill out this application.
  2. Submit a $50 check made out to the Contractor Licensing Board.
  3. Supply three references on forms provided in the application.
  4. Take and pass the Arkansas Business and Law test and provide a copy of the score.
  5. If applying as a corporation, LLC, LP, or LLP, attach a copy of the articles/filing from the Secretary of State.

The requirements for unlimited licenses are:

  1. Fill out this application.
  2. Submit a $50 check made payable to the Contractors Licensing Board.
  3. Supply three references on forms provided in the application.
  4. Take and pass the Arkansas business and Law test and provide a copy of the score.
  5. Provide current compiled balance sheet less than one year old, and all statements must show positive net worth.
  6. If you’re applying as a corporation, LLC, LP, or LLP, attach a copy of the articles/filings from the Secretary of State.
  7. Supply proof of worker’s compensation if you have one or more employees.

Home improvement license

Home improvement licenses are for contractors such as roofers, painters, tile installers, and other specialty trades. These licenses come in limited and unlimited categories. Like the other licenses, limited contractors can work on projects up to $50,000.

The requirements for a limited home Improvement license are:

  1. Fill out this application.
  2. Choose a specialty as on page 6 of the above.
  3. Show proof of your work experience in the chosen specialty.
  4. If you’re applying as a corporation, LLC, LP, or LLP, provide articles/filings from the Secretary of State.

The requirements for an unlimited home improvement license are:

  1. Submit a $50 check made payable to the Contractors Licensing Board.
  2. Choose a specialty.
  3. Show proof of work experience in the chosen specialty.
  4. Provide current compiled balance sheet less than one year old, and the statements must show positive net worth.
  5. If you’re applying as a corporation, LLC, LP, or LLP, provide articles/filings from the Secretary of State.

Arkansas subcontractor licensing

Subcontractors don’t have to carry licenses as long as they’re working for a licensed contractor. They do, however, have to get certified with the Contractors Licensing Board.

The steps to registering for certification are:

  1. Fill out this application.
  2. Submit a $100 check made payable to Contractors Licensing Board.
  3. Choose a specialty.
  4. Submit proof of a $10,000 bond.
  5. Provide proof of worker’s compensation insurance.
  6. Documentation proving the business is in good standing with the Secretary of State.

Penalties for unlicensed contracting

Arkansas contractors caught working without licenses when the work requires one are susceptible to fines and penalties issued by the state.

This could cost them between $100 and $200 for each offense, and each day constitutes a new offense. Unlicensed contracting is also a Class A misdemeanor, which means it could carry some jail time.

Protecting your payments in Arkansas

The fines and penalties involved in unlicensed contracting in Arkansas can be pretty steep. But those fines are nothing compared to what can happen if you don’t protect your payments and safeguard your cash flow. Beyond licensing requirements, Arkansas contractors have specific documents and deadlines they need to keep their eye on to maintain their lien rights.

For instance, general contractors, subs, and suppliers must provide a Pre-Construction Notice to Owner before starting work on residential projects in order to preserve their rights to a mechanics lien. Sub and suppliers must send a Notice to Owner and Contractor within 75 days of last furnishing. All tiers must provide a Notice of Intent to Lien at least 10 days before filing a lien.

Also, all tiers on a project in Arkansas have up to 120 days from last furnishing to file a mechanics lien. Once filed, they have 15 months to initiate enforcement on the lien, or the lien could expire. 

When it comes to protecting your payments and cash flow, these deadlines aren’t worth messing around with. Be sure to keep your eyes on the licensing and mechanics lien deadlines so your payments are always safe.